My average for April was $43.23 per week and am down to $50.80 per week for the year. If I get my average down to $50 versus the $50.80 I will save an additional $41.60.
I am doing better than I expected but I was out of town for a week and that did help. Doing so well this month means I only have to keep my budget below $49.50 per week to reach my goal of spending less then $50 on average per week. That is more than I thought I we be able to spend, coming off March.
However, I did not start my garden because of a late snowfall. I will be starting this weekend. I did grab a basil plant and eating fresh basil has been lovely. We need to plant lettuce, tomatoes, cucumbers, cilantro, red onions and jalapenos. I cannot wait till the apple tree and blackberry bushes start giving off fruit. We consider the garden expenses part of our food budget so that may increase our expenses this month we expect to save some money by gardening.
I am swinging by the WIR grocery hounds a little more than I used to, especially with Wegmans deciding to only change their sales every other week. This means I do not have to check the blogs for Wegmans except every other week. This will save me some time but I wonder if it will end up costing me some money. Tops Market has not had many deals in the last two weeks but the two weeks prior it had quite a few. The ebb and flow of deals is to be expected and that is why I stockpile when I can.
By reaching out to others this lifestyle change is easier than I thought it would be. We still struggle with this change but it is not as hard as I thought it would be.
1 Million Dollars
Thursday, May 5, 2011
Tuesday, May 3, 2011
Term Life Insurance
There are two types of life insurance, term or whole. For most people term insurance is the way to go. The only exceptions come about when you are bringing in a lot of income and have maxed out your 401k and IRAs. But for young people, I do not think any of us are in that boat so I am going to focus on term life insurance. Term life insurance is misnamed, it should be named income replacement insurance.
Term life insurance comes in different amounts of money ($100,000 to $1,000,000) and for different terms (10-30 years). The cost starts lowest for the lowest term and amount of money and increases as you increase either variable. The benefit for getting the longest term is the rate won't increase for that term.
Often people can get a small amount of life insurance through their employer for free and larger amounts for pennies on the dollar. My employer gave $20,000 for free and an extra $1000 for every .10/week. This means $5.20 for every $1000 extra you would want per year. However, I did not take advantage of any extra life insurance through my job. You may be asking, why? My fiance and I both work, we live on my fiance's income (the higher salary) and bank both mine and the rental income. Given that term life insurance is suppose to replace the income of the provider I do not need any. We could hypothetically self-insure for my burial if my work did not provide the $20,000 free life insurance.
Now in my fiance's case, I am dependent on his income so he should have life insurance. On the other hand, I do have both my job and the rental, so I could survive without his income, though it would be tight. This would change if I got pregnant or started graduate school. We also determined that after graduate school my fiance likely would have life insurance through his job and therefore we would not need a long term. Considering all of this,if we chose to get life insurance, we would choose the ten year term and probably the lowest amount that we could get ($100,000).
While we were checking out disability insurance we checked out term life insurance for both my fiance and me. The cost would be between $100-$150 per year for either of us. We could get life insurance for both of us, and disability for just $50 more than I expected to pay just for disability. Though that is amazing I do think we will wait until we need the insurance and for now just add more money to our Roth IRAs.
Term life insurance comes in different amounts of money ($100,000 to $1,000,000) and for different terms (10-30 years). The cost starts lowest for the lowest term and amount of money and increases as you increase either variable. The benefit for getting the longest term is the rate won't increase for that term.
Often people can get a small amount of life insurance through their employer for free and larger amounts for pennies on the dollar. My employer gave $20,000 for free and an extra $1000 for every .10/week. This means $5.20 for every $1000 extra you would want per year. However, I did not take advantage of any extra life insurance through my job. You may be asking, why? My fiance and I both work, we live on my fiance's income (the higher salary) and bank both mine and the rental income. Given that term life insurance is suppose to replace the income of the provider I do not need any. We could hypothetically self-insure for my burial if my work did not provide the $20,000 free life insurance.
Now in my fiance's case, I am dependent on his income so he should have life insurance. On the other hand, I do have both my job and the rental, so I could survive without his income, though it would be tight. This would change if I got pregnant or started graduate school. We also determined that after graduate school my fiance likely would have life insurance through his job and therefore we would not need a long term. Considering all of this,if we chose to get life insurance, we would choose the ten year term and probably the lowest amount that we could get ($100,000).
While we were checking out disability insurance we checked out term life insurance for both my fiance and me. The cost would be between $100-$150 per year for either of us. We could get life insurance for both of us, and disability for just $50 more than I expected to pay just for disability. Though that is amazing I do think we will wait until we need the insurance and for now just add more money to our Roth IRAs.
Sunday, May 1, 2011
Update on the millionaire goal- April
As of May 1, 2011 I have $9780 in my investment account. I am $220 short of having $10,000, my first step in my millionaire goal. This month I will be depositing $219.75 into Fidelity. This income will come from our rental, $200 and the 2% reduction in social security $19.75. I am considering just putting in the extra twenty five cents just to hit the $220 and reach $10,000 this month.
The remain $50 (or 49.75) I will now be putting towards my fiance's disability insurance payment. It looks like we will have the disability insurance paperwork finished by the end of the month and we will have a new annual bill of $360. We will begin to look for life insurance in a few months.
It looks like I should have $10,000 (if the markets cooperate)by May or June of this year. I plan to increase the amount going to the IRAs once we save enough for the disability insurance and life insurance. This should be in two months, July of 2011.
My next minigoal will then be $25,000 where I can stop investing in target date funds and diversify myself using mutual funds. It looks like I will be able reach that goal in three to four years once we increase the amount going to the IRA.
The remain $50 (or 49.75) I will now be putting towards my fiance's disability insurance payment. It looks like we will have the disability insurance paperwork finished by the end of the month and we will have a new annual bill of $360. We will begin to look for life insurance in a few months.
It looks like I should have $10,000 (if the markets cooperate)by May or June of this year. I plan to increase the amount going to the IRAs once we save enough for the disability insurance and life insurance. This should be in two months, July of 2011.
My next minigoal will then be $25,000 where I can stop investing in target date funds and diversify myself using mutual funds. It looks like I will be able reach that goal in three to four years once we increase the amount going to the IRA.
Thursday, April 28, 2011
Disability Insurance
Everyone who has a job and needs the income should have disability insurance, but it can be very expensive. Disability insurance pays about 60% of your wage if you are injured and cannot work. Some pay only if you are unable to work any job, other will pay if you cannot work in your current position. The real kicker is that if you buy disability insurance not through your employer it costs about two to three percent of your salary. Now if you are like me, you are sitting there going "ouch". I'm suppose to save 10-20% of my salary, now you saw I have to give up another 2-3% for disability insurance? And we are not even counting in taxes here.
But disability insurance is important and worth the cost. What are you going to do if you can't work? What can you do if your job requires you to talk and you have lost your voice? Or what about loosing a hand? Do you think you could do your current job if you lost a body part or were in a wheelchair? The only benefit on buying disability insurance not through your employer is it is not taxable earnings but if your buy disability insurance pretax, through your employer, it will be taxable earnings.
My fiance and I have been looking for disability insurance for him for a few months but again, it is very expensive. We could only find disability insurance costing 3% of his salary. We had decided to wait to the wedding and then just bite the bullet and get it. A month ago we were at a home show and MetLife had a booth there. Since I am an eternal optimist, I thought lets see if they have a lower price. We just finished the paperwork and MetLife gave a quote that is under 2% of his salary. What seemed to make a difference with them is that my fiance is a researcher and paid by the government and that is something MetLife considers. Also, his lifestyle and job are not risky and I believe someone with a risky lifestyle would pay more. With that combination MetLife made us an amazing offer. I honestly was shocked on how low the price was. We went home and I read over every little bit of the paperwork and it seems legitimate.
Because of the savings, my fiance and I are now able to afford life insurance as well and may also be able to put more into our retirement accounts.
But disability insurance is important and worth the cost. What are you going to do if you can't work? What can you do if your job requires you to talk and you have lost your voice? Or what about loosing a hand? Do you think you could do your current job if you lost a body part or were in a wheelchair? The only benefit on buying disability insurance not through your employer is it is not taxable earnings but if your buy disability insurance pretax, through your employer, it will be taxable earnings.
My fiance and I have been looking for disability insurance for him for a few months but again, it is very expensive. We could only find disability insurance costing 3% of his salary. We had decided to wait to the wedding and then just bite the bullet and get it. A month ago we were at a home show and MetLife had a booth there. Since I am an eternal optimist, I thought lets see if they have a lower price. We just finished the paperwork and MetLife gave a quote that is under 2% of his salary. What seemed to make a difference with them is that my fiance is a researcher and paid by the government and that is something MetLife considers. Also, his lifestyle and job are not risky and I believe someone with a risky lifestyle would pay more. With that combination MetLife made us an amazing offer. I honestly was shocked on how low the price was. We went home and I read over every little bit of the paperwork and it seems legitimate.
Side note, I make no money off this post.
Because of the savings, my fiance and I are now able to afford life insurance as well and may also be able to put more into our retirement accounts.
Saturday, April 23, 2011
Reminder-Lack of Coupons
Because of Easter Sunday there should be no coupons this Sunday. For some reason on holidays newspapers do not include coupons. I do not understand why coupons are not included but they are not. You can get online coupons through mypoints at http://www.mypoints.com/emp/u/centers/couponCenter.vm, also when you use the coupons on mypoint you will earn 10 points per coupon.
It does appear that next Sunday, May 1st, 2011, should have double the amount of coupons that we normally get.
It does appear that next Sunday, May 1st, 2011, should have double the amount of coupons that we normally get.
Friday, April 22, 2011
Cash Payments, ER and Getting a Discount by Just Asking
A month ago I had to work a very early shift at work, starting at 6:30 in the morning and we were not able to get lunch until 12:30. Now, to some that may not be a big deal but I eat every three to four hours so by six hours I was not feeling well. I went down to eat and yet I did not start feeling any better. I went back to work and then just started shaking and was afraid I would fall.
Now you may be wondering, what does this have to do with personal finance? Well, my boss told me to go to the emergency room but I told I could not afford it (my copay is $200) and she told me worker's comp would take care of it. After resting for a bit, I still felt bad but I did not think I needed to go but she insisted and I did not feel up to arguing. That was a mistake. My employer did not cover it because it was not an injury even though the doctor believes I started feeling sick based on not eating.
Now comes the kicker, because I did not tell my insurance (again, because I thought work would pay the bill) they would not cover it. The bill came to me and it was $275. I had always heard that hospital bills are negotiable but because I had amazing insurance I had no experience with it. I called the billing department and left a message and within a few days got a call lowering my bill $100 and allowing me to pay $10/month. Now I only owe $175 and because I will not be charged interest I have decided to take the entire 18 months to pay the bill off. I had some money put aside for health costs but had two other health bills so that fund is low. By calling and asking I will not have to dip into my EF or derail some of my other goals.
Now you may be wondering, what does this have to do with personal finance? Well, my boss told me to go to the emergency room but I told I could not afford it (my copay is $200) and she told me worker's comp would take care of it. After resting for a bit, I still felt bad but I did not think I needed to go but she insisted and I did not feel up to arguing. That was a mistake. My employer did not cover it because it was not an injury even though the doctor believes I started feeling sick based on not eating.
Now comes the kicker, because I did not tell my insurance (again, because I thought work would pay the bill) they would not cover it. The bill came to me and it was $275. I had always heard that hospital bills are negotiable but because I had amazing insurance I had no experience with it. I called the billing department and left a message and within a few days got a call lowering my bill $100 and allowing me to pay $10/month. Now I only owe $175 and because I will not be charged interest I have decided to take the entire 18 months to pay the bill off. I had some money put aside for health costs but had two other health bills so that fund is low. By calling and asking I will not have to dip into my EF or derail some of my other goals.
Monday, April 18, 2011
Financial Independence
My definition of financial independence is enough income producing assets to pay my bills without having a job. Right now the net income I need is about $24,000 per year but that would increase if my fiance lost his job, because we get health insurance through his job. The additional cost of insurance would be about $500 per month so $6000 per year. This means my goal, at this time, is to get enough income producing assets to make $30,000 per year.
So far my investment income from 401ks, Roth IRAs, Traditional IRA and taxable accounts give me less than $300 per year. This assume about a three percent withdrawal which should last me indefinitely. My rental should bring me $525 per month, which is about $6300 per year at best, more likely to be about $5250 because of vacancies. Obviously I am no where near financially independent.
But what could make me financially independent? I could buy more duplexs/rentals or I could put more in my investment accounts, or I could pay down the debt we owe. I should do all of them, but I do not have the money currently to do so.
This is when one must decide what minigoal will help achieve the goal the best. In my case, we were looking at buying a second duplex but with my other, nonfinancial goals, that did not seem to be a good idea at this time. Paying down debt, at this time would not change my monthly payments for quite sometime therefore I decided against prepaying my loans. However, in the end getting rid of my debts will remove $4595.76 of expenses from my annual budget. This amounts to 15% of the budget. That is major and I think I should pay down the debt but I do not think it will be as immediately helpful as my other option. Therefore I will be putting more in my investment accounts. As of next month I will be increasing our contributions to our Roth IRAs. I am still deciding how much to increase by, but it will be increased by at least $150/month.
So far my investment income from 401ks, Roth IRAs, Traditional IRA and taxable accounts give me less than $300 per year. This assume about a three percent withdrawal which should last me indefinitely. My rental should bring me $525 per month, which is about $6300 per year at best, more likely to be about $5250 because of vacancies. Obviously I am no where near financially independent.
But what could make me financially independent? I could buy more duplexs/rentals or I could put more in my investment accounts, or I could pay down the debt we owe. I should do all of them, but I do not have the money currently to do so.
This is when one must decide what minigoal will help achieve the goal the best. In my case, we were looking at buying a second duplex but with my other, nonfinancial goals, that did not seem to be a good idea at this time. Paying down debt, at this time would not change my monthly payments for quite sometime therefore I decided against prepaying my loans. However, in the end getting rid of my debts will remove $4595.76 of expenses from my annual budget. This amounts to 15% of the budget. That is major and I think I should pay down the debt but I do not think it will be as immediately helpful as my other option. Therefore I will be putting more in my investment accounts. As of next month I will be increasing our contributions to our Roth IRAs. I am still deciding how much to increase by, but it will be increased by at least $150/month.
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